Sustainable Energy Is More Cost-Efficient Than You Think: Three Ways That Renewable Energy Is Becoming Cheaper for Companies

With all the attention given to wind, solar and other forms of clean power, you’d be forgiven for assuming sustainable energy use is more prominent than it really is. Just 17 percent of the energy produced in the U.S. last year came from renewable sources, and much of that was from older hydroelectric dams.

This may be changing, however, as American businesses are beginning to realize that moving to renewable energy provides them with a host of benefits including reduced operating costs, enhanced resilience, and a boost in public image. As of February 2018, 15 percent of Fortune 500 companies have committed to the EPA’s Green Power Partnership program. This number is expected to increase as the companies that are taking a leadership role in adopting clean energy have collectively reported savings of $3.7 billion.

There are multiple ways businesses can integrate green power into their operations—many involving little or no up-front capital from owners. In fact, an entire industry has evolved around the development and financing of renewable energy projects as the banking industry has learned that green energy is a safe bet.

Here are three ways organizations can take advantage of the fact that accessing renewable power is cheaper and easier than ever.

#1. Utility-scale solar, power purchase agreements and green power billing

Companies are operating in a world where renewable energy is common, and the technology required is no longer out of reach for the average business. In the last nine years, photovoltaic (PV) systems fell in price by more than 70 percent. It’s likely the reason for the more than 2,500 utility-scale solar power system facilities across the US.

In many cases, larger organizations are opting to buy renewable energy directly through power purchase agreements. Last year, U.S. companies entered into agreements for more than 8.5GW of wind and solar power, more than double the amount in 2017. Apple, Amazon, and Facebook have all committed to major power purchase agreements from large developers. Meanwhile, the largest solar farm east of the Mississippi has been approved in Virginia. Most of the enormous 500MW project’s planned production has already been sold through PPAs with Microsoft, the University of Richmond, and a consortium of businesses.

While power purchase agreements continue to increase in popularity this isn’t the only option for renewable energy investments. Businesses can take advantage of their current electricity provider’s green power purchase options to begin to offset their usage, giving them little reason not to pursue renewable energy options. Prices are still higher than traditional rates, but the cost of renewables continues to decline and green power purchases incentivize electric utilities to increase the amount of renewable energy they sell.

With tax benefits, local incentives, and reduced utility costs, the number of companies taking the plunge and installing photovoltaic solar systems on site is getting larger by the day. But while the incentives might help sweeten the deal, businesses still hold concerns over the reliability of wind and solar energy—what if the wind speed is low, or it’s a cloudy day?

Battery Energy Storage Systems (BESS) provide an opportunity for businesses to leverage cost savings in ways they never could before. When combined with renewable energy, they qualify for significant tax credits, and they allow owners to store the solar energy they produce during the day and use it during evening hours when grid power is most expensive. This helps even out the demand on the larger utility grid and explains why in some parts of the country, owners are encouraged or even required to provide battery systems when they install renewable energy.

Perhaps most attractive for users with critical operations, battery energy storage systems enable owners to ride-through power blips and common short-duration outages. On-site energy storage can also improve overall grid stability, providing a benefit to the greater community. The added stability and load-leveling allows utilities to meet the periods of peak demand without firing-up more carbon-intensive generating assets, so total emissions are reduced.

As with wind and solar PV, the cost of battery storage is falling quickly and this trend is expected to continue.

#3. Microgrids with renewable energy

The world relies on technology more than ever, and businesses, hospitals and emergency service providers are constantly preparing for the possibility of an extended power outage from extreme weather events or a cyber-attack on our utility infrastructure. Companies today have far greater options beyond installing standby diesel generators, which are maintenance-intensive and provide little benefit under normal conditions.

With the reduced cost of PV, storage, and fast-acting control systems, businesses can now benefit from the creation of resilient microgrids. A microgrid is a limited geographic area that can operate independently from the larger electrical grid during times of disruption. They can be configured in a variety of ways with a mix of power sources including renewable energy, battery energy storage, and fuel-fired generators.

Under normal conditions, a microgrid is typically connected to the larger electrical utility which it benefits by providing added capacity, stabilization, and reduced emissions. The owners of the microgrid enjoy reduced energy bills, credits for the renewable energy, and increasingly, incentives from the local electric utilities. During times of utility grid disruption, the microgrid becomes its own island, providing continuity of operations and overall resilience for its owners.

To add a microgrid into your businesses’ infrastructure requires a comprehensive approach to energy and resilience planning. But with the right partnerships and economy of scale, businesses are realizing that implementing microgrids with renewable energy can be far more cost-effective than pursuing dual, separate paths of renewable energy and building-by-building back-up generators. There are numerous economic models available and organizations willing to provide capital and design expertise to develop successful projects.

A look to the future of renewable energy

Solar and wind energy are mature technologies and are now the lowest-cost option for energy generation across a large portion of the United States. This economic benefit is a factor that more than 170 leading global companies have realized, but these savings are just one benefit. Organizations also receive the positive branding renewable energy is providing to their businesses’ reputation.

This is an opportunity for smaller companies to take inspiration from their industry leaders and reduce costs while maximizing their use of renewable energy, to leverage positive public perceptions and widen their margins. It takes a big-picture perspective. Fortunately, it’s never been easier or cheaper for businesses to implement clean energy practices and it’s expected that this trend will continue. comment

Solar Magazine is an online solar PV magazine comprised of various aspects of the solar energy industry. We share news, technologies, developments and insights. We’re integrating forces to help better promote the development of the industry. And we seek the universalization of solar lifestyle.